Phil-n-Texas

just caught another point on a micro-fib move up and looks like testing fork mid-line upper triangle boundry confluence area...

had a close below lower boundry of pink fork so she's outta here... scalped a point of a micro-fib on the move down...

another re-draw of forks for 3200 tick ES... i may not be able to keep up with this all the way through as i'm going to have to leave here in about an hour...

redraw / add of forks on the 3200 tick ES...

ES daily... i realize this is a "price action" thread but it can pay to be aware of commonly used indicators such as MA's, oscillators, etc. on daily, weekly.... lots of convergence right here at the 50% retrace area... 20(red), 50(dk-blue), 150(pink) MA's... many oscillators in oversold territory...

Pre-mkt doodling on 3200 tick ES... not set in stone, just the boundries as of the posting of this msg... may add another fork if close below existing fork mid-line continues south...

Jon, My take on the patterns is really no different than probably anything else that's out there on the subject... and really, C&H, H&S, wedge, flag, etc. are just names for consolidation patterns. the way i try to trade them is to wait for a close past the neckline or b/o line and then a pullback for entry... ideally there's some confluence near my perceived entry point of fib level, trend-line, pivot, etc. and also reversal time zones. also as i mentioned in a previous post i watch market internals and the tick to time entries... if I get filled then it's trade management after that... i like to use a scale out method that gets me out 1/2 position on the first move... so say i have 4 contracts... 2 are off 1st at a target set to a tick or so below the swing high, then my stop is moved up to where if it's hit that i'm only out net a couple ticks... this usually still allows me room for the trade to work... the remaining 2 contracts... 1 i usually set for a tick or two below the 23.6% fib extension above the swing high... or an obvious resistance level... (TL, pivot, key MA, prior day high, low, open, close, gap, etc.) if that's hit, then i move my stop for the remaining 1 contract to break even and employ a trailing stop based on successive swing lows not unlike what Maelstrom has described here. one other thing i like to do is be aware what the range is for the first 30 minutes of trading and also where the close is at 60 minutes in relationship to the mid-point of the 1st 5 minutes of trading... the later usually is a good indicator of the overall bias for the day... ok, so that's more than describing the C&H pattern... but again, whether it's C&H, H&S, wedge, flag, or whatever, it's gonna be different every day and I just try to do the "stand back and squint my eyes" every once in awhile to try and see if anything is shaping up pattern wise... fwiw, and IMHO tick charts are much better at revealling the patterns... it was a real eye opener when i started using tick charts.... as I told a trading buddy of mine, the patterns just seem to jump out.... not sure if that helps

You too M, try to stay cool in da Texas heat... here's the 3200 tick ES today with some annotations... what's not on the chart is trade management... so, the failed ICH pattern trade (short) turned out to be a looser... however, it was not too bad because I did manage to get half my position off for a point before it reversed and the stop was just below the entry candle so it was almost breakeven.... if i'm disciplined in following my rules for high probability entries... then getting the first 1/2 of my position off is lilely and then i have reduced risk scenario for the remaining 1/2. in fact there was an earlier IHS pattern that I tried to trade thinking it would move to fill the half gap but my order didn't get filled... good thing cuz it ended up failing too! in fact, by the time the 9:00 zone rolled around one of the scenarios i thought might develope would be the IHS trade to fill the half gap then a sell-off from there to close near the LOD... just goes to show ya...

Ditto that Tim... I use the 1min. $TICK as well... and have a dynamic linear regression channel plotted along with a couple 25MA's (one based on bar high and the other on bar low). I wait for the $TICK to be below the low MA and on the low side of the LR channel for longs and just the opposite for shorts... I also use the IB version of $TICK as it tracks faster but since they don't have the high/low MA's capability I just use a 25SMA keltner with .5 STD and it plots about the same. I also keep an eye on other internals like advance/decline and up/down volume. I have grid of charts that the internals are on and if I see a setup then I just look to make sure a majority of the internals are in agreement and then use the low or high tick to time it. I also like to watch 5 min. charts of the $DJI and COMP.... it always helps when those two are marching in formation. but the overall setup and big picture is always a deductive process of spotting the larger pattern on the 3200 tick chart (globex) w/o any indicators. of course i always look at the 30, 60, and daily charts... as I mentioned in one of the threads I linked to above, i have some longer term charts that have trend lines and forks spanning years. all good stuff going on here...

M, Thought I would provide a few links to some posts I did on another thread related to this subject... here are some examples (ES) of trading price / pattern / fibs / pullback, then figuring out targets using fib and/or measured pattern extensions... http://www.traderslaboratory.com/forums/trading-markets/9551-how-complex-your-trading-system-3.html#post116185 http://www.traderslaboratory.com/forums/trading-markets/9551-how-complex-your-trading-system-4.html#post116367 http://www.traderslaboratory.com/forums/trading-markets/9551-how-complex-your-trading-system-4.html#post116439 http://www.traderslaboratory.com/forums/trading-markets/9551-how-complex-your-trading-system-5.html#post116446

Maelstrom, thanks for the reply and annotated chart... yes, i understand and agree with the 1st setup practice... i guess my post and observation was that Steve had other longs that triggered on the way up, so if one was so inclined to trade that way, then maybe there was another possible setup there. re: chart sizing... it's been my experience that the larger size charts tend to eliminate a lot of the noise but i will still go to the smaller chart to time entry. i use to trade the 3, 5, and 15 min. charts on equities and after going through all that i found that i did better trading daily EOD close and still do for my retirement accounts. anyway, great stuff... cheers

Pardon me if I chime in here with a question for Steve and/or Maelstrom... wouldn't there be a long entry at about the 10:50 green bar??? I see a larger swing from either 93.70ish to 94.60ish or from 93.10... or does this one not qualify per the rules. great thread btw, thanks for sharing...:applaud: i've been using a similar market flow analysis of simple HH/HL - LL/LH and buy the pullbacks to fib levels or retrace to a pattern breakout point. Also just read an article from Stocks and Commodities by Ron Black er: Clear signal method... another interesting trend change / swing technique... a 2 part article from Sept. & Oct. 2010.

Congratulations TL! To your continued success!

i will often use a 1600 or 400 tick chart to help time entries... as for volume, yes i have volume bars on a 5 min. chart. i still have time based charts so i can keep tabs on what those guys are looking at. the tick charts are always globex (extended hours) and i usually keep the time based charts on normal trading hours.

ES 3200 tick doodling... the large ascending triangle was the basis for today's patterns... when it broke the lower TL it was then time to wait for a messured pullback which in this case was a perfect 38.2% fib level that was confluent with the lower TL of the triangle which became resistance. notice how the white a-fork lays out near perfect support at the mid-line and bottom bounce... and again the midlne at the end of day (turned resistance). i drew the fork at the same time as the triangle since it had some very clear anchors.... when price moved to the lower triangle and fork midline, there was a slight bounce... so i knew it was for real at that point and it then proved itself several times thereafter.... there's another fib missing from the drawing (too cluttered) but it's for the last swing down and the retrace at the a-fork midline is near perfect 50% retrace. lots of great opportunities today. have a great weekend.

fwiw, here's a video clip i put together that shows the progression of drawings on the 3200 tick chart for the ES today... the very last one is just the A-forks to show how well they worked today for SR & targets... i left all my fibs off though as you wouldn't be able to read the chart if all of them were on there... but they change constantly. i also have trendlines and fibs levels that are completely out of view that are on larger time frames going back weeks, months, years... 2011-04-07_1420 - BBQ-pHiL's library

i'm inclined to say simple but then again one could interpret it as complex since there's so much nuance that comes only with experience... for example, below is a 3200 tick chart of today's trade on the ES. the blue trendlines were drawn by me before the market even opened. i did some micro trades along the way but the main move/trade was the breakout and subsequent pullback to test the b/o TL and move up. the pullback of the measured swing leading to the breakout is confluent with the TL and 40% fib retracement. my plan was to take 1/2 off on the 1st move (breakout level ~ 1332 swing high), move stop to breakeven, then set target at -23.6% fib extension which was hit. as you can see, the chart is very simple with no indicators, just price (heiken ashi candles) and since it's a tick chart, volume graph really isn't necessary. I also look at multiple time frames, time of day zones, and market internals, for additional confirmation. this was a high probability setup... every day is different but no matter what i'm trading it's always the same in terms of process which is a deductive one.... pattern, trend or range, confluence, then i move to shorter timeframes or ticks to time entries. sometimes events will happen to where I'll have to re-draw everything to accomodate a more developed pattern or setup... there are no two alike. all the while i'm trying to conceptualize the big picture of what the market wants to do (the other traders)... and most times it's telling me. from there it's trade and risk management. my "edge" if you want to call it that is probably experience in pattern recognition and mega hours analyzing charts and price action. and the way i trade may not work for anybody else but me as my trading style is an amalgamation of all my trading experience. and it's true that most of the best things are free... also, i have to say based on my experience as both a musician and trader that you either have it or you don't. just my .02

there were 4 things that flipped the switch for me: 1) chart pattern recognition 2) market flow analysis 3) fixed risk allocation (money management) 4) scaling the above came about after years of soul searching and paying "tuition" as an amature trader but when it happened it seems like it all came together within a 6 month period.... i.e., things started working more in concert. there are of course other components and techniques that I use but the above were life-savers in being able to survive as a trader in early development. re: fibs... i use them quite a bit for calculating entries and targets in conjunction with pivots and good ol' fashion support and resistance + confluence.

i use Econoday... click on the daily to get an expanded few of current day. 2010 Economic Calendar

check out TOS (Think or swim)... it's FREE and you can get realtime data with a funded account. nice because they have almost every indicator imaginable, their own realtime data feed, "on demand" so you can practice trades based on historical data... plenty of tutorials, videos, etc.... their tech support is pretty good too. i use them and then Interactive Brokers (IB) TWS as a backup... i do not use TOS's brokerage though (high commishes) and actually place my trades with IB (very low commishes). as for complicated... well, i haven't used a platform yet that didn't come with a learning curve. good luck

i saved this chart template as a reminder of seizure inducing indicator information overload... i've found out that in most cases an indicator within the same family (oscillators, momentum, etc.) often tell the same story... it's just a matter of interpretting what it's telling you... also, most indicators are all some variation of price, volume, and time... all are lagging so in a way it's yesterdays' news. at the end of the day what really matters is being able to read the market and figure out where all the other traders are going or likely to go. For many years now I've been using basic commonly used moving averages, volume with a moving average overlay and then monitor broader market information such as indexes, advance / decline, $TICK / $TRIN, Stochastics Momentum, and plotted pivot points. Learn candlestick patterns, chart patterns, fibonacci, and multiple timeframe confluence, and good old fashioned trendline analysis... all of this takes a considerable amount of screen time for it to become 2nd nature. don't get wrapped around the axle trying to find the perfect indicator cuz it ain't out there. enjoy the journey...

the IB booktrader is very much like the TOS Active Trader ladder / DOM thing. here's a link to a webinar that goes over its features etc. https://interactivebrokers.webex.com/ec0605lb/eventcenter/recording/recordAction.do;jsessionid=jlGvMcSKv21qVy1TvxnSmQTqTMWZL5HDXJhlwFtqLh18GTm2n2MY!-1446735493?theAction=poprecord&actname=%2Feventcenter%2Fframe%2Fg.do&apiname=lsr.php&renewticket=0&renewticket=0&actappname=ec0605lb&entappname=url0107lb&needFilter=false&&isurlact=true&entactname=%2FnbrRecordingURL.do&rID=44492942&rKey=1f144c564fccf9ac&recordID=44492942&rnd=1787550564&siteurl=interactivebrokers&SP=EC&AT=pb&format=short also here's a pic i took of if from my screen... as for Nirvana / OmniTrader, I REALLY liked it for awhile and they have a lot of really neat features and if you get the pro version you can write your own systems, scripts, and strategies... tons of bells and whistles. The problem is I think they have sooooo much feature rich components to their systems but the s/w is very buggy... seems like a lot of unfinished business. Too much to type really... I hung with 'em for a couple years but there was a major snafu with their trade plans / integrated brokerage that lost me and at least a few other guys i know of some $$$. Additionally since moving on from Nirvana, I now incorporate tick charts, Heiken Ashi candles, Range Candles, and a few other goodies in my setup and Nirvana doesn't do any of that stuff as of the writing of this message. I wrote some pretty nice strategies in OT Omni-Language and did real well with it but the integrated brokerage / trade plans snafu and their total lack of response to the problem was the last straw. When I reported the problem they acknowledge that it was an issue and had been reported the previous week. No bulletin of anything warning users to not use it. I didn't get hurt too bad but one guy lost about 14K because of it. The other thing is, it's fairly pricey... i spent way too much money with those guys. I still have it on my machine and use it mainly for scanning stocks and so forth but don't really use it to trade anymore. I'm using TOS and IB and that's been working really well for me ever since dumping Nirvana. Here's a pic of a trade I did with OmniTrader earlier this year. This shows the chevrons on the side-bar of the chart which could be dragged to wherever you wanted them, but the trade-plans would automate multi-level scaling in and out to your hearts desire. Could also program stops based on N-bars, indicators or whatever you can think of. Plus with the Nirvana system one needs to have a data feed and some subscriptions but with TOS and IB I don't really need that, or no more than the exchange fees. So with the OT system to do RT daytrading was about another $100 / mth to do some futures. If the OT system didn't have the bug issues and they had tick charts etc. then it would probably be the only system I would need. I just got tired of trouble shooting stuff for them all the time and eventually the instability issues forced me to go elsewhere. I've never used Ninja, but the graphics I've seen of it here and elsewhere look a lot like the Nirvana stuff.

fwiw, i've been actively trading since 2000 and full time for 3 years now.... never took a course or anything of the sort. however, there's a boat load of free info out there to learn the basics. one website that i refer a lot of folks to that has a lot of good free info is Swing Trading Guide | Learn How to Trade Stocks Like a Pro! great examples and Craig is a very good writer... also has something like 14 or more free e-books. also Alan Farley's HRE (Hard Right Edge) website has a lot of helpful info... most of it is free. Technical Analysis: Hard Right Edge technical analysis, swing trading and day trading tools, education and original strategies for day traders and swing traders As for books... there's an short book (about 80 pgs.) by Ed Downs called 7 Chart Patterns that Consistently Make Money... was a good one and very simple plus he has some good tips on entry and exit targets. setup a sim account (again, free at TOS or the like) and practice, practice, practice... but 12k for a mentorship course??? no way man. good luck

fwiw, i scale out while progressively tightening stops and then trail the last part of the position with a break even + a tick protective stop. i just started using IB's booktrader and went live with it today.... makes it much easier to do the scaling thing. i was using Nirvana's trade plans in their Omnitrader platform which was really slick but it had some s/w bug issues and ended up costing me some dough on a few trades. TOS has a bracket system in their active trader tool but i'm able to do the same thing in book-trader.

MMS, saw this thread in my daily feed and your original post so thought i would chime in. In short, the answer to the original question would be fear and greed which still give me problems to this day. Also, I can relate to your story re: over optimization. I went through that phase along with trying to automate and mechanize systems. In the end I fell back on some rules that I've applied in other areas of my life. i.e. simplify... in my endeavors as a musician, i decided a long time ago to not get too wrapped up in the latest gadgetry and so forth. my thinking was that i wanted to be able to perform well no matter what instrument or playing situation i was in, so i never deviated from insturments or gear that wasn't readily available or most likely to be handed to me if for example i was asked to set in with somebody at a moments notice. ok, maybe not the best example but that's just kind of the way i started working in my trading... and as such, i spend more time trading and making a buck than pouring over lines of code and so forth.